Courses

    This course provides a comprehensive overview of Islamic finance, from principles governing economic activities in Islam to advanced topics such as Islamic project finance and retail banking, with a view to explore possibilities of offering Shari’ah-compliant services in the Western countries alongside conventional finance. This course examines how to provide U.S. Muslim community with access to financing products compatible with their religion, as well as the methods to assist foreign investors who are in search of Shariah-compliant opportunities in the U.S. to invest, and U.S. companies which are interested in exploring the investment opportunities in Shariah-compliant projects, in more developed Islamic finace markets in the Middle East and South East Asia.

We examine the core principles of the Shariah, including prohibition on Riba (inlcuding interest on loans) and Gharar (excessive uncertainty), as well as contracts compatible with Shariah that are used to provide credit and investment services to customers, including Ijara (leasing), Istisna’ (commissioned construction or manufacturing), Murabaha (sale at markup, or cost-plus), Musharakah and Mudarabah (partnerships) and Sukuk (Islamic bond and securitization). We also examine Shariah principles governing investment and portfolio strategies in Islamic funds.

This course also discusses Islamic banking and provision of retail credit services to customers in compliance with Shariah, including the asset-liability structure of Islamic banks, specific issues arising from conduct of banking business in compliance with Shariah, and the positions of U.S. banking regulators on Islamic banking.

We also study governance and regulation of contemporary Islamic financial institutions and the methodology for determining compliance with Shariah (i.e., Shariah Supervisory Boards and their rulings, known as Fatwa).

Finally, we discuss certain common misunderstandings about Islamic finance regarding the association of this type of financing with terrorism.

Course participants will be evaluated based on the results of a three-hour open book exam.